Bennett v. Ins. Co. of the State of Pennsylvania
| Decision Date | 09 February 2012 |
| Docket Number | 1 CA-CV 10-0815 |
| Parties | RAYMOND BENNETT and VALENCIA BENNETT, husband and wife, Plaintiffs/Appellants, v. INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, a foreign corporation; AIG DOMESTIC CLAIMS, INC., a foreign corporation, Defendants/Appellees. |
| Court | Arizona Court of Appeals |
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
DEPARTMENT C
MEMORANDUM DECISION(Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure)
The Honorable Linda H. Miles, Judge
Robert J. Hommel, P.C. By Robert J. Hommel and George V. Sarkisov
and Friedman Rubin By William S. Cummings and Richard H. Friedman Attorneys for Plaintiffs/Appellants
Steptoe & Johnson LLP By Timothy M. Strong and Bennett Evan Cooper and Douglas D. Janicik Attorneys for Defendants/Appellees
¶1 This appeal arises out of a lawsuit filed by Raymond and Valencia Bennett against the Insurance Company of the State of Pennsylvania ("ICSOP") and AIG Domestic Claims ("AIG") (collectively, "Defendants"). The Bennetts allege, inter alia, Defendants breached the implied covenant of good faith and fair dealing in handling claims stemming from Raymond's work-related injury at U-Haul International, Inc. The superior court granted Defendants' summary judgment motions on the Bennetts' liability and damages claims. As we explain, we agree with the Bennetts they presented triable issues of fact on their claim Defendants acted in bad faith by scheduling an independent medical examination ("IME") and selecting Zoran Maric, M.D., to perform the IME. Further, in light of this holding, we direct the superior court to reconsider the Bennetts' request for punitive damages on this issue, and reverse the grant of summary judgment on Valencia's claim for loss of consortium. We affirm summary judgment on the Bennetts' other claims, and express no opinion on their argument the discovery master appointed by the superior court should not have allowed Defendants to redact attorney-client privilege-related information, as it is not properly before us.
¶2 An insurer breaches the implied covenant of good faith and fair dealing when "the insurer 'intentionally denies, fails to process or pay a claim without a reasonable basis.'" Zilisch v. State Farm Mut. Auto. Ins. Co., 196 Ariz. 234, 237, ¶ 20, 995 P.2d 276, 279 (2000) (quoting Noble v. Nat'l Am. Life Ins. Co., 128 Ariz. 188, 190, 624 P.2d 866, 868 (1981)). An insurer has Id. at 238, ¶ 21, 995 P.2d at 280. The question of whether an insurer's actions were reasonable has both objective and subjective elements. See State Farm Mut. Auto. Ins. Co. v. Lee, 199 Ariz. 52, 57, ¶ 15, 13 P.3d 1169, 1174 (2000); Trus Joist Corp. v. Safeco Ins. Co. of Am., 153 Ariz. 95, 104, 735 P.2d 125, 134 (App. 1986).
¶3 We review the superior court's grants of summary judgment de novo to determine "whether there are any genuine issues of material fact." Unique Equip. Co. v. TRW Vehicle Safety Sys., Inc. , 197 Ariz. 50, 52, ¶ 5, 3 P.3d 970,972 (App. 1999). If "the evidence or inferences would permit a jury to resolve a material issue in favor of either party, summary judgment is improper." Comerica Bank v. Mahmoodi, 224 Ariz. 289, 292, ¶ 19, 229 P.3d 1031, 1034 (App. 2010) (quotation omitted). We view the facts and reasonable inferences in the light most favorable to the Bennetts, the parties against whom judgment was entered. Unique Equip. Co. , 197 Ariz. at 52, ¶ 5, 3 P.3d at 972.
¶4 First, the Bennetts argue the superior court should not have granted summary judgment on their argument Defendants acted in bad faith when they required Raymond to submit to an IME, and allegedly selected a biased doctor to perform the IME. For the reasons discussed below, we agree these two interrelated issues present genuine issues of fact precluding summary judgment.
¶5 On September 27, 2005, Raymond was attempting to connect a trailer to a vehicle in the course of his employment at U-Haul when "he felt 'a pop' in his neck." After experiencing increasing neck pain that radiated into his right arm, he sought medical attention. Doctors initially prescribed pain medications and physical therapy for his injuries, but,when his symptoms did not improve, ordered MRI and electrodiagnostic evaluations. Charles Gagnon, D.O., performed the electrodiagnostic tests and found evidence of carpal tunnel syndrome in Raymond's right hand. Dr. Gagnon's report suggested the carpal tunnel syndrome was "longstanding" and Raymond's "overall picture appear[ed] to be an aggravation of his preexisting cervical degenerative disc disease." After reviewing the MRI results, Ali Araghi, D.O., concluded that several of Raymond's cervical disks were herniated and recommended surgery.
¶6 AIG subjected the surgery recommendation to two levels of review. The AIG adjuster first approved the surgery on November 30, 2005, and "ICSOP's utilization-review department" approved it again eight days later. On December 1, in between the two approvals, an employee of Health Direct (a company Defendants describe as "a medical-management firm which assists ICSOP with coordinating medical care") wrote in a message to the AIG adjustor that because Raymond had signs of preexisting cervical degenerative disc disease and carpal tunnel syndrome, they "may want to look at getting [an] IME, at least to have [carpal tunnel syndrome] addressed." On December 5, 2005, a U-Haul employee also wrote to the AIG adjustor After receiving this email, the AIG adjustor scheduled the IME.
¶7 AIG selected Zoran Maric, M.D., to perform the IME. Dr. Maric evaluated Raymond's MRI scan and his symptoms and concluded Raymond's "pain complaints [were] nonorganic in nature" and that no "further treatment" was needed. Dr. Maric also emphasized that he did not "agree with Dr. Araghi that Mr. Bennett [was] a surgical candidate."
¶8 After receiving Dr. Maric's IME report and noting the conflict between Dr. Araghi and Dr. Maric's "two totally different opinions," AIG scheduled a second IME with Terry McLean, M.D., a doctor Raymond apparently selected. Dr. McLean recommended surgery and disagreed with many of Dr. Maric's conclusions. AIG then again approved the surgery, which Dr. McLean performed on March 27, 2006.
¶9 Although an insurer is "entitled to seek an independent medical examination" to ensure surgery is necessary, Mendoza v. McDonald's Corp., 222 Ariz. 139, 159, ¶ 64, 213P.3d 288, 308 (App. 2009), it may not use the process to breach the implied covenant of good faith and fair dealing.
¶10 The record suggests AIG acted on one or both of two grounds for ordering an IME: evidence suggesting Raymond had "longstanding" carpal tunnel syndrome and preexisting cervical disc disease, and the U-Haul employee's suggestion that Raymond "ha[d] been a problem employee since he started." A jury could find that Defendants ordered the IME for the second reason, and, if so, it was a "needless adversarial hoop[]," Zilisch, 196 Ariz. at 238, ¶ 21, 995 P.2d at 280, or evidence of "impermissible 'doctor shopping,'" Mendoza, 222 Ariz. at 159, ¶ 64, 213 P.3d at 308. There is accordingly a genuine issue of material fact as to whether Defendants acted in bad faith by ordering an IME.
¶11 The Bennetts further assert that Dr. Maric "had earned a reputation as someone who 'usually disagrees' with another surgeon's request for surgical authorization," and argue Defendants "knew, through [their] adjustor, that Dr. Maric always gave the same opinion and never agreed with a request for surgery." Defendants do not dispute this characterization of Dr. Maric, and admit they selected him, but argue they did not do so "for improper reasons, such as to delay surgery or intimidate Bennett into withdrawing his request." The recordcontains evidence contradicting this argument; specifically, after receiving Dr. Maric's report, the AIG adjustor told U-Haul she "probably shouldn't have used" Dr. Maric because she had "noticed that Dr. Maric says the same thing in just about every IME" and "[Dr. Maric] said his usual, return to full duty, no need for further care, etc." A jury could reasonably infer from these statements that AIG intentionally selected a doctor they knew would disagree with the recommendation for surgery; this evidence, coupled with the interrelated question of AIG's motive in ordering an IME, also establishes a genuine issue of material fact that precludes summary judgment.
¶12 Defendants essentially argue that even if they did cause an unnecessary delay in surgery by selecting Dr. Maric for an IME -- a conclusion we leave to a jury and do not decide here -- the delay was not objectively unreasonable because Dr. Araghi did not consider Raymond's injury an "emergency." Defendants further argue no harm was caused because Raymond's condition did not worsen as a result of the delay, and their "immediate decision to pay for a second IME by a doctor of Bennett's choice disposes of any claim of subjective bad faith." We are unpersuaded there are...
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